The Impact of Unions on the Wage Distribution: Evidence from Higher Education

We estimate the impact of unionization on the wage distribution of Canadian university faculty using longitudinal administrative data on salaries and exploiting the staggered rollout of unionization across institutions.

We estimate the impact of unionization on the wage distribution of Canadian university faculty using longitudinal administrative data on salaries and exploiting the staggered rollout of unionization across institutions. We find that unionization compressed salaries: Wages at the bottom of the unconditional distribution increased by roughly 10 percent, while wages at the top were unaffected. Our evidence suggests that these distributional impacts were driven by the introduction of contractual salary floors. We also estimate little impact of unionization on faculty employment. Instead, our results suggest that the increase in universities’ wage bills was financed by an increase in student enrollment. (JEL I23, J31, J45, J51)